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HomeMy WebLinkAboutr 10483 approve multi family housing rev loan 2005 johnsonRESOLUTION NO. 10483 (2013 Series) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO APPROVING THE REISSUANCE OF A MULTIFAMILY HOUSING REVENUE LOAN BY THE HOUSING AUTHORITY OF THE CITY OF SAN LUIS OBISPO FOR THE DEL RIO TERRACE APARTMENTS LOCATED AT 2OO5 JOHNSON AVENUE WHEREAS, the Housing Authority of the City of San Luis Obispo (the "Authority") is authorized by Chapter 1 of Part 2 of Division24 of the Health and Safety Code of the State of California to issue bonds and borrow money to finance multifamily rental housing facilities located within the area of operation of the Authority; and WHEREAS, on October 31,2003, the Authority borrowed $4,000,000 (the "Authority Loan") from First Bank of San Luis Obispo (the "Original Bank") pursuant to a Loan Agreement, dated as of October l, 2003 (the "Authority Loan Agreement"), between the Authority and the Original Bank; and \ryHEREAS, the Authority loaned (the "Borrower Loan") the proceeds of the Authority Loan to Johnson DRT Associates, a California limited partnership (the "Borrowet") pursuant to a Loan Agreement, dated as of October 1, 2003 (the "Borrower Loan Agreement"), between the Authority and the Borrower; and WHEREAS, the Borrower used the proceeds of the Bonower Loan to hnance the acquisition and construction of 41 units of multifamily rental housing for seniors known as Del Rio Terrace Apartments (the "Project"), located at 2005 Johnson Avenue in the City of San Luis Obispo (the "City"); and WHERBAS, the Authority Loan is considered to be "a qualified exempt facility bond" under Section 142(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and Section 147(Ð of the Code requires that the "applicable elected representative" with respect to the Authority approve the incurrence by the Authority of the Authority Loan following the holding of a public hearing with respect thereto; and WHEREAS, the Authority determined that the Council of the City was the "applicable elected representative" to approve the incurrence by the Authority of the Authority Loan and on May 6, 2003, the Council held a public hearing regarding Authority Loan and adopted Resolution No. 9450 (2003 Series) approving the incurrence by the Authority of the Authority Loan for the purpose of providing financing to the Borrower for the Project; and \ryHEREAS, in July of 2005, the Original Bank agreed with the Authority and the Borrower to amend the Authority Loan Agreement, the Borrower Loan Agreement and related documents to modify certain terms of the Authority Loan and the Borrower Loan; and \ryHEREAS, the amendments resulted in a "reissuance" of the Authority Loan under applicable provisions of the Code and in order to maintain the tax-exempt status of the interest on the Authority Loan the Council held a public hearing on July 19, 2005 regarding the R 10483 ResolutionNo. 10483 (2013 Series) Page 2 reissuance of the Authority Loan and the ownership and operation of the Project, and on that date the Council adopted Resolution No. 9709 (2005 Series) approving the reissuance by the Authority of the Authority Loan; and WHEREAS, Union Bank, N.A. (the "Bank"), has succeeded to the interests of the Original Bank under the Authority Loan Agreement and is the current payee of the Authority Loan; and \ryHEREAS, the Bank has now agreed to allow modifications to be made to the Authority Loan Agreement and the Borrower Loan Agreement to lower the interest rate on the Authority Loan and on the Borrower Loan, but such modifications will, under the Code, cause another "reissuance" of the Authority Loan; and WHEREAS, in order to maintain the tax-exempt status of the interest on the Authority Loan paid by the Authority to the Bank, prior to the modification of the Authority Loan Agreement and the Borrower Loan Agreement, the Authority needs the Council to approve the new reissuance of the Authority Loan following a public hearing on the matter; and \ryHEREAS, notice of the required public hearing has been duly given as required by the Code, and the Council has heretofore held the public hearing at which all interested persons were given an opportunity to be heard on all matters relative to the reissuance of the Authority Loan and the ownership and operation of the Project; and WHEREAS, the City is not a party to any of the agreements or other documents relating to the Authority Loan, the Borrower Loan or the financing of the Project, and none of the financing of the Project, the Authority Loan or the Borrower Loan impose any legal, financial or moral obligation upon the City with respect to the hnancing of the Project; and WHEREAS, it is in the public interest and for the public benefit that the Council approve the reissuance of the Authority Loan for the aforesaid purposes. NOW THEREFORE BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Action. The Council of the City of San Luis Obispo hereby approves the reissuance of the Authority Loan by the Authority for purposes of the Code. This resolution shall take effect immediately upon its adoption. Upon motion of Vice Mayor Christianson, seconded by Council Member Smith, and on the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: Council Members Ashbaugh and Smith, Vice Mayor Christianson and Mayor Marx None None Council Member Carpenter ResolutionNo. 10483 (2013 Series) Page 3 The foregoing resolution was adopted this 10th day of December 2013. ATTEST: City Clerk APPROVED AS TO FORM: Dietrick City Attorney CMC